IRS whistleblower says Justice Department slowed, stifled Hunter Biden case

A Justice Department spokesman stood by Garland's previous comments, and the lead Democrat on the House committee said the allegations should not have been released publicly while lawmakers are still vetting them.

The transcript almost certainly will fuel criticism of the Justice Department's five-year investigation of Hunter Biden, which this week led to a proposed plea agreement on two misdemeanor charges that will probably allow him to avoid jail time. Biden is due in federal court in Wilmington, Del., on July 26 to enter his guilty plea, which must be approved by a judge.

The criminal probe of Biden was given the code name Sportsman, Shapley told lawmakers, and it was "an offshoot of an investigation the IRS was conducting into a foreign-based amateur online pornography platform."

His account offers a host of new allegations, including a text message that Biden allegedly sent on July 30, 2017, that invoked his father - at that time a former vice president - as he tried to get a business partner to fulfill some expected promise.

"I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled. Tell the director that I would like to resolve this now before it gets out of hand, and now means tonight," the younger Biden allegedly told businessman Henry Zhao. "And Z, if I get a call or text from anyone involved in this other than you, Zhang, or the chairman, I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father."

It is unclear what specific commitment the message refers to. A spokeswoman for Hunter Biden's legal team did not immediately comment.

Shapley sought whistleblower protections through his attorney in April and was interviewed by the committee in May, behind closed doors. Mark Lytle, Shapley's lawyer, said his client "was brave and he stood up and he said something. He has endured some tough times because of it. But he said he would rather stand up and say something than not say something about it."

Some of Shapley's most eyebrow-raising allegations center on a meeting on Oct. 7, 2022. By that point, The Washington Post reported that federal agents had concluded there was enough evidence to charge Hunter Biden with tax and gun violations.

That discussion at the U.S. attorney's office in Wilmington, which included prosecutors, FBI agents and IRS agents, "ended up being my red-line meeting," Shapley told lawmakers. He said Weiss claimed to the agents that he was not, in fact, the "deciding official on whether charges are filed."

Weiss then surprised the agents, Shapley said, by saying that "the Biden-appointed D.C. U.S. Attorney Matthew Graves would not allow him to charge in his District." Up until that point, Shapley said, he had expected Biden would face the most serious tax-related charges in Washington, because that's where he was living in 2014, when Shapley said he believes Biden's most serious misconduct occurred.

Weiss allegedly told the group that he had known for months that Graves's office had rejected filing charges against Biden there. Shapley also said Weiss told the group that he had asked the Justice Department to appoint him as a special counsel, which would give him broader independence in the investigation, "and was denied that authority."

Everyone at the meeting, Shapley said, "seemed shell-shocked, and I felt misled by the Delaware United States Attorney's Office. At this point, I expressed to United States Attorney Weiss several concerns with how this case had been handled from the beginning. The meeting was very contentious and ended quite awkwardly."

Shapley said he was later told that another possible jurisdiction to bring charges, California, had also rejected them.

Asked about Shapley's account, a Justice Department spokesman stood by Garland's past remarks. "As both the Attorney General and U.S. Attorney David Weiss have said, U.S. Attorney Weiss has full authority over this matter, including responsibility for deciding where, when, and whether to file charges as he deems appropriate. He needs no further approval to do so," the spokesman said in a written statement.

Weiss's office declined to comment Thursday. But earlier this month, responding to a letter from House Judiciary Chairman Jim Jordan (R-Ohio) seeking documents related to the Biden investigation, Weiss said the attorney general had granted him "ultimate authority over this matter, including responsibility for deciding where, when, and whether to file charges and for making decisions necessary to preserve the integrity of the prosecution, consistent with federal law."

"I have fulfilled my responsibilities, consistent with Department practices and procedures, and will continue to do so," the letter said, denying Jordan's request for documents. "Throughout my tenure as U.S. Attorney my decisions have been made - and with respect to the matter must be made - without reference to political considerations."

In an emailed statement, Patricia Hartman, a spokeswoman for Graves and the U.S. attorney's office for D.C., wrote: "As the Attorney General has said, U.S. Attorney Weiss was given full authority to bring charges in any jurisdiction he deemed appropriate. He did not need approval from this office or the U.S. Attorney to bring charges in the District of Columbia."

Shapley said that in many ways, the Biden evidence was textbook evidence of tax evasion.

"He was expensing personal expenses, his business expenses," Shapley said. "There was a $25,000 to one of his girlfriends and it said, 'golf membership.' And then we went out and followed that money - it was for a sex club membership in LA. . . . There were multiple examples of prostitutes that were ordered basically, and we have all the communications between that where he would pay for these prostitutes, would book them a flight where even the flight ticket showed their name. And then he expensed those."

A week after Shapley's May 26 appearance before the House Ways and Means Committee, the panel heard from an IRS investigator who worked under Shapley. That transcript was also made public Thursday, though the investigator's name was redacted. Both Democrats and Republicans participated in both interviews. The investigator largely echoed Shapley's testimony, adding details about Biden's alleged tax evasion and saying he had been barred from taking routine investigative steps in ways he had not encountered in other cases.

In one instance, the investigator said that when he expressed interest in interviewing Hunter Biden's children about expenses deducted on their behalf on Biden's tax returns, he was told by a prosecutor that "it will get us into hot water if we interview the President's grandchildren."

"That was completely abnormal, out of the question," the investigator said, according to the transcript. "And it's a part of our normal process that we go and interview people, especially people who are receiving money or receiving payments related to a case like this."

The top Democrat on the House Ways and Means Committee, Rep. Richard E. Neal (Mass.) criticized the chairman, Rep. Jason T. Smith (R-Mo.), for what he called a premature release of the two interviews.

"The Minority takes whistleblower allegations extremely seriously, but the fact is today's exercise was not ready for primetime," Neal said in a statement. "Two interviews do not make an investigation when more than 50 employees were named."

Smith told reporters that the allegations were too significant to keep under wraps. “Not one, but two IRS employees are blowing the whistle with evidence that the federal government is not treating taxpayers equally when enforcing tax laws,” he said. “Let me emphasize: This was an investigation in the ordinary course of work at the IRS. It was not ordered by any individual, any chairman or any political entity.”